Unpacking India’s new maternity benefit bill

The Lower House of the Indian Parliament has cleared the Maternity Benefit (Amendment) Bill. Passed by the Upper House last year, the Bill is now set to become law, coming into effect after the President’s assent in a few weeks. By extending paid maternity leave from 12 weeks to 26 weeks at establishments with 10 or more employees, the Bill places India in the company of just 16 other nations with such a provision.

The Bill institutionalises other provisions for new and expecting mothers such as flexibility to work from home and availability of crèche facilities at establishments with more than 50 employees. Likely to benefit approximately 1.8 million women in the organised sector, the Bill has been received with understandable enthusiasm.

By all accounts, this is a much-needed step in the right direction for India.

Despite increases in the number of girls in education and in women’s average incomes, studies show that the female participation rate in the workforce in 2008 was lower than in 1983. It is estimated that, at best, only 22 percent of Indian women participate in the formal economy. This is much lower than the global average of 47.1 per cent.

India also has the largest percentage of urban women dropping out of the workforce between junior and middle levels. This ‘leaking pipeline’ phenomenon is often attributed to the inability to re-join the competitive workforce after primary care-giving responsibilities.

Notably it was reported that in India only 55 per cent of mothers exclusively breastfeed for the first six months, compared with 70 per cent in Nepal and 76 per cent in Sri Lanka. The Bill seeks to address these issues through liberal provisions for improving maternal and child health and supporting women’s re-absorption in the workforce.

At the same time, the glaring limitations of the Bill cannot be ignored. Experts and employers have argued that increasing maternity leave from 12 to 26 weeks could create a selection-bias against women. The Bill mandates employers to pay full wages during the extended maternity leave. This will increase costs for employers and may result in more discrimination and fewer job opportunities for women. To avoid this, some countries devised different models for financing maternity leave. For instance, in the United Kingdom and Germany, maternity benefits are financed by a combination of funds from the employer and the government.

Although it is well-intentioned, the Bill itself includes several inconsistencies.

While the maternity leave period has been extended to 26 weeks, this extension does not apply to women with two or more surviving children — the motivation behind this decision is unclear but it could be a push towards family planning.

The Bill discriminates against adoptive parents as well as children by limiting maternity leave to 12 weeks for ‘a woman who adopts a child below the age of three months’. This move not only discourages the adoption of babies over the age of 3 months, but also denies an equal opportunity for adoptive parents to bond with their child.

Crucially, while more international private sector companies have started recognising the need for paternity leave, the Bill makes no mention of it. This entrenches the gendered segregation of unpaid care-work, and diminishes the father’s role in raising children.

The Bill also does not cover the unorganised sector. This includes agricultural labourers, seasonal workers, domestic workers or construction workers. Since approximately 90 per cent of working Indian women are in the unorganised sector, and are arguably more vulnerable to exploitation, the impact of the Bill is automatically diluted.

Unorganised female workers are eligible for other schemes such as Indira Gandhi Matritva Sahyog Yojana, a conditional cash transfer scheme that provides Rs 6,000 (US$90) to pregnant and lactating women in three instalments for the first two live births. But such lump-sum cash transfer schemes do not provide long-term financial and job security. Shockingly, only two of India’s 29 states — Tamil Nadu and Odisha — have fully implemented this benefit.

The Bill comes on top of a plethora of existing labour laws that provide maternity benefits to women across sectors such as the Employees State Insurance Act and the Factories Act. Both offer 12 weeks of paid maternity leave. Most recently, during his special new year’s eve address, Prime Minister Modi announced another scheme for financial assistance to pregnant women to help reduce maternal mortality and malnutrition. These schemes differ in their coverage, scale and benefits. How these multiple benefits will be financed, and sustainably complement each other is not clear.

But what is clear is that while India recognises the problem, the policy solutions lack uniformity and consistency. A recent study demonstrated that despite being eligible for maternity benefits, women working in mines, factories, plantations and small shops are often unaware of relevant schemes due to lower levels of education and personal freedom. Establishments are bound by law to share information regarding benefits. But the procedures are not always followed.

It is also telling that despite vocal commitments towards women’s empowerment, when the Bill was discussed in the Lower House, only 53 of over 500 Members of Parliament were present.

The Bill is historic because it recognises and attempts to remedy the double burden faced by working women. Yet it is important that the existing loopholes are addressed and conditions are created for these policies to bring positive, sustainable change. India’s women deserve more than short-sighted token gestures.

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Vidisha Mishra is a Junior Fellow at ORF. As a technical expert on gender, her primary responsibilities include mainstreaming gender dimensions across ORF's programmes on G20, BRICS and their place in global governance; the impact of digital economy on society; and the India-Africa >>